A reverse mortgage is an excellent option if you are 62 years and above and looking for ways to borrow money. It’s a good option, especially when you are low on funds. The difference between a traditional and a reverse mortgage is that there are specific guidelines for loans and home sales.
How Does the Process Work in Lexington, KY?
A reverse mortgage in Lexington, KY is acquired using your home’s equity as security for the loan. It’s almost similar to the traditional mortgage plan, but the difference comes with payment terms. You are legally entitled to the home, but instead of paying off this mortgage monthly, you will be required to pay the loan off when you no longer live in it.
Another primary concern with his type of mortgage is that you might end up paying back more than you borrowed because of the monthly interest and other fees that add up to your loan balance. Your home might have increased in value by putting it up for sale; therefore, paying it off may not be a problem.
Can You Sell a House with a Reverse Mortgage in Lexington, KY?
The most frequently asked question is whether you can sell a house with a reverse mortgage. The answer is yes. You can sell your house just like on a traditional mortgage. This is because you become the homeowner and can do what you please with it. Your reverse mortgage becomes due immediately after you sell the home, which means you must pay it off.
Shaun Martin, a cash home buyer with We Buy Houses In Denver who specialized in purchasing houses with reverse mortgages stated, “You can sell a house with a reverse mortgage in any state. The hardest thing for someone who is trying to sell a house with a reverse mortgage is finding a buyer with legitimate experience that can close on the house quickly and without any headaches for the seller. I have ended up buying houses from distraught sellers after a so-called expert couldn’t close on the house, stating the reverse mortgage made it too hard but let me say this if you are selling a home in Colorado and it has a reverse mortgage, and need to get rid of it fast for cash you can click here for 2 very important things:
- A detailed guide on how to sell a house with a reverse mortgage AND
- Access to a legitimate home buyer in Denver.”
A homeowner that intends to keep the home has two options: paying the mortgage loan or taking out another mortgage to cover the balance accrued from the reverse mortgage.
You can also opt-out of a reverse mortgage. A few options to end this mortgage are:
- Refinancing to pay off the loan.
- Selling your home
- Using your own money to pay the mortgage.
This type of mortgage can be repaid at any time without penalty.
Benefits
· You can supplement your retirement income and meet your financial goals.
· It enables you to maintain a quality lifestyle in your old age.
· It brings a sense of a financially secure future.
· It helps you buy a new home.
As the homeowner in Lexington, KY, you are required to use the home as your primary residence. As a result, you are expected to take care of its maintenance, insurance, property taxes, and homeowners’ fees.
More Profit
Do you want to know how to maximize your profit when selling a house with a reverse mortgage? I will assume you said yes. One thing you can do to get more cash when you sell your home is sell the appliances for cash before you sell the house.
Can I really sell the house without appliances?
You can absolutely sell a house without a stove or any other appliances according to this expert guide produced by a real estate professional of 20+ years.
Requirements
This mortgage plan is designed to help seniors. There are requirements to be met for one to qualify for this mortgage:
· Must be 62 and above in age.
· Use the home as your primary residence.
· You must own or be on the title of the home.
· Must be fully aware of your financial options and responsibilities.
Foreclosure
There are a few circumstances that lead to the foreclosure of the reverse mortgage in Lexington, KY. Foreclosure for a typical traditional mortgage will result from not making payments. The reasons for foreclosure differ regarding reverse mortgages because you pay when you no longer live in them.
- When you no longer use the house as a primary residence. The mortgage agreement states that the homeowner should not leave the house for 12 consecutive months. This includes medical reasons too.
- Selling the home.
- Death of the owner
- Unpaid insurance or property taxes.
- If the house is not maintained correctly.
Types
There are four primary types of reverse mortgages in Lexington, KY:
Home equity conversion mortgage(HECM) – is the most common reverse mortgage. The Federal Housing Administration issues the loan.
Proprietary reverse mortgages – this is a considerable option if the value of your home exceeds the Federal Housing Administration(FHA) limit. Proprietary mortgages have a higher interest rates compared to HECM loans.
Single-purpose reverse mortgages – this is the cheapest mortgage option offered mainly by local, state, and non-profit agencies.
HECMs for purchase – you can purchase this mortgage product to buy a new home.
When your home sells for more than you owe your lender, the remaining proceeds after you have paid off your mortgage, interests, and any other accumulated fees are all yours. In an instance where your property is worth less than the original loan amount, the lender cannot sue you for the difference because reverse mortgages are non-recourse.
Can You Sell a House with a Reverse Mortgage if the Owners Have Passed Away?
The loan payment immediately becomes due when you inherit a reverse mortgage home in Lexington, KY. After losing a loved one it can be complicated to decide on what to do with the inherited property. The financial aspects and paperwork involved with this procedure can also be very tedious. In a situation of death, there are four basic options for you:
- Putting the house up for sale. The money after the sale of the home can be used to fully pay back the balance on the reverse mortgage. If the house value is less than you owe, you can sell it for 95% of its appraised value. The balance left after paying off your mortgage is yours to keep.
- Pay the loan amount should you choose to keep the home. You can take out a traditional mortgage on your home to finance the reverse mortgage.
- When you don’t know what to do with the house or don’t have enough to buy the house, your easiest option will be to deed the house to the lender.
- Your last will be allowing the lender to foreclose on the home. This will negatively affect your credit score hence the last after you have exhausted all other options.
You are free to sell your reverse mortgage house in Lexington, KY at will because you retain the property title. It’s essential to know your home’s current value before selling it because if you continue with the sale, your reverse mortgage becomes due. Your home’s current value should be enough to pay the loan and cover the closing costs.